ELEANOR HALL: Over the last 24 hours, the Prime Minister has repeatedly insisted that he will lead the party to the next election, whenever it's held.

But that has not quelled the growing feeling in the Liberal Party that he cannot win and that a late change to Peter Costello is still a live option.

The Treasurer could end the speculation, but he's declined an invitation to speak to The World Today.

Our Chief Political Correspondent, Chris Uhlmann, has been working the phones in Canberra, and he joins us now.

Now, Chris, I understand the Prime Minister has just addressed the leadership question. What has he said?

CHRIS UHLMANN: Well, the interesting thing here is that he's addressed it, over the last few days, a number of times, and in fact he was asked the question when he was at a press conference last week with Vladimir Putin, and he simply referred people to statements he had made earlier.

Now, as you know, Eleanor, words in politics are a very important thing. If the Prime Minister felt that there was no reason to say anything beyond what he'd said already, then he would've just done that. But in what he's about to say, and what you'll hear, you'll see he sends a very clear message and that message is he's not going anywhere and he's prepared for a fight.

This is the Prime Minister a short time ago.

JOHN HOWARD: ... was resolved last year. It is not in the party's interests to revisit it. That is my position, my very strong position.

I believe the next election will be difficult for the Coalition, but we can win it, and I hope people understand from observing me in 30-odd years of public life that I have never run from a fight before, and I don't intend to do so now.

ELEANOR HALL: That's a very considered statement from the Prime Minister, John Howard, there. But, Chris, the word is that Peter Costello will not challenge, so if there's this leadership speculation and the Prime Minister's saying he won't go, and Peter Costello won't challenge, where are we at?

CHRIS UHLMANN: Absolutely. The question about what he just said, that you have to ask, is which fight is he talking about? Is he talking about the next federal election, or is he talking about his own party room?

Now, it's been made quite clear by all the supporters of Peter Costello, and many other members of Parliament, that there will not be a challenge. The Prime Minister has more or less just said that they will have to blast him out. So he's not going to resign of his own volition, but there is massive momentum building at the moment, that's the way it was put to me by someone earlier this ...

ELEANOR HALL: Chris, we're just losing you a little there.

CHRIS UHLMANN: ... within Parliament for a change.

ELEANOR HALL: Chris, we just lost you on the last sentence there. You were saying there was massive momentum building. Can you just tell us what are the sorts of messages that you're hearing are being sent to the Prime Minister, and from whom?

CHRIS UHLMANN: From very high up. I have to say that I feel that at the moment much of what we're hearing is coming from those who you would consider to be in the Costello camp, although it's difficult at the moment to get anyone to call me back from what I might describe as the Howard camp, which also, I think, speaks volumes about what might be going on at the moment. It's impossible to say.

But I'm hearing from people that people have just turned off to the Prime Minister and that the word that comes through most often now is "selfish". He keeps saying that he wants to stay in the interests of the party, and while it's in the best interests of the party to do so, but the message I'm hearing from people is they believe what he said in the last 24 hours paints him as being very selfish. It's not in the party's interests, they believe, to go to an election which will see them in opposition for a decade.

ELEANOR HALL: This is hugely embarrassing for the Prime Minister as he hosts this address to Parliament by the Canadian Prime Minister. Why has it ramped up again right now? Is it the polls?

CHRIS UHLMANN: It is the polls. If you want to take it back, there was nervousness already, but there was a sense that the Government was making something of a comeback, albeit marginal, over the last couple of months, and then you had that aberrant Newspoll, if you like, which blew out the lead between Labor and the Liberal Party by, or the Coalition, by nearly 18 points, which is just an unbridgeable gap. They'd been hoping to get it much closer before they went to the polls.

So now this has crystallised a sense of discontent within the Federal Parliamentary Party at the moment, and there's a strong feeling that this has got to be resolved within the next 24 hours.

Now, how that happens, though, what mechanism there is to do that, is at this stage, if there's going to be no challenge, unknown, how people would go about doing it if there's going to be no tap, no vote, well, we'll wait and see.

CHRIS UHLMANN: I'm sure that it will certainly be the elephant in the room if it's not actively discussed. There was talk before about a Cabinet meeting where John Howard, as it was said, bared his throat to the Cabinet room. Well, I've heard different reports about that, whether he did or he didn't ask his colleagues about whether or not he should go then.

Whether the question will be raised, well certainly there's a joint party room meeting as well coming up, and it would certainly, you would have to think, be raised there. And even though people are saying there's going to be no challenge at the moment, things have changed a lot in the last 24 hours. They might change a lot in the next 24.

ELEANOR HALL: And, Chris, where's the Federal President in all this? If there is a stalemate that needs breaking, is the Federal President a player?

CHRIS UHLMANN: And that's the question on everyone's lips, where's Chris McDiven at the moment? There are some saying that this is precisely why John Howard put here in this position in the past. Leaders of the party, like Tony Staley or Ron Walker, would certainly have been players in this at this stage and would've stepped in for the good of the party. That's not happening at the moment, people are asking where she is.